Harnessing the activity of protein kinases and phosphatases is crucial for signal transduction by hormones and growth factors. Inhibitor-1 (I-1) represents the first mechanism identified for hormonal control of protein phosphatases. PKA phosphorylates and activates I-1 to suppress the activity of PP1, a major cellular protein serine/threonine phosphatase and amplify the cellular responses to the second messenger, cyclic AMP. Though identified as a regulator of glycogen metabolism in skeletal muscle, I-1 is widely expressed and has been implicated in many physiological processes. Our studies identified the growth arrest and DNA damage-inducible gene product, GADD34, as a novel protein scaffold that recruits PP1 and I-1 to regulate protein translation. The PP1-binding domain of GADD34 shares structural homology to the protein product of the Herpes Simplex Virus HSV-1 gamma-34.5 gene that generates a phosphatase that dephosphorylates the eukaryotic translation initiation factor, eIF2alpha, and facilitates protein synthesis. Our studies suggest that the PP1/GADD34/I-1 complex is a major eIF2alpha phosphatase in many mammalian tissues and is disassembled in response to cell stress, such as hypoxia and nutrient deprivation. This results in increased eIF2alpha phosphorylation and shut-down of protein synthesis. Persistent phosphorylation of eIF2alpha has also been linked to programmed cell death. The discovery of a mutation in the gene encoding the major human pancreatic eIF2alpha kinase in Wolcott-Rollins (WR) syndrome suggests that eIF2alpha phosphorylation-dephosphorylation controls insulin synthesis and the survival of pancreatic beta-cells. Thus, WR individuals develop early insulin-dependent diabetes and other serious disorders. These and other studies suggest that eIF2alpha phosphorylation functions as an important physiological mechanism for sensing glucose and nutrient availability. Thus, understanding the structure-function and regulation of the eIF2alpha phosphatase should provide new avenues for the treatment of viral infections, diabetes and other human diseases. The Specific Aims of this project are: 1) Utilize genetic and biochemical assays to define the molecular basis for I-1 as a regulator of PP1 function, specifically the dephosphorylation of eIF2alpha and initiation of protein translation. 2) Define the role of GADD34 in the assembly of the mammalian eIF2alpha phosphatase and the transduction of physiological signals that regulate protein synthesis and dictate the switch between cell death and survival.